Permits Up 89 Percent in October

By Sarah Baker

Local homebuilders filed 89 percent more new home permits during October compared to October of last year.

Shelby County homebuilders filed 83 permits last month, a healthy boost from the 44 filed during October 2011, according to real estate information company Chandler Reports, www.chandlerreports.com. October permits also posted a 6 percent increase from the 78 permits filed during September.

Don Glays, executive director of the Memphis Area Home Builders Association, said Shelby County’s homebuilding surge mirrors national housing starts, which rose in October 42 percent year over year – its highest rate in more than four years.

“It’s consistent with what we have been thinking and projecting,” Glays said. “There’s been an increase across the country, so we’re happy about that.”

October permits averaged 3,361 square feet and $245,517. That compares to October 2011 averages of 3,484 square feet and $246,181, respectively.

Keith Grant of Keith and David Grant Homes LLC said his firm’s sales are up about 30 percent from last year. The low interest rates have continued to help the market, and he expects the market to be “very strong” in the spring.

“The market’s been better this year than it was last year,” Grant said. “We’re seeing a lot more presales in the fall market than we have in the past. It’s a sign that inventories are continuing to go down and there’s still a demand for new homes right now.”

The local subdivisions with the most activity during October were Wolf River Ranch in 38017 (nine; 3,981; $370,222) and Kensington in 38002 (eight; 3,072; $195,161).

Builders sold 77 homes in October, averaging $259,366 and totaling $20 million in sales volume. That’s a 10 percent increase from October 2011, when they sold 70 homes averaging $219,115 and totaling $15 million.

Going forward, Glays anticipates a more consistent sales-to-permit ratio due to builders keeping less speculative homes in inventory.

“Builders who have inventory are maybe keeping a half a dozen or so in inventory, but when they sell, they’re building another one,” Glays said. “They’re not projecting huge sales and building 20 and 25 houses at a time the way that they were in ’06 and ’07.”